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Patent troll Intellectual Ventures is more like a HYDRA

1200+ shell companies guard 10,000 patents very fiercely

Stanford University researchers have compiled the most extensive set of documentation to date of the activities of patent troll Intellectual Ventures – and their work reveals a behemoth of truly epic scale.

The study, The Giant Among Us, turned up an impressive 1,276 shell companies operated by Intellectual Ventures, at least partly to keep prying eyes away from its business model, and estimates that between 30,000 and 60,000 patents are held by the “mass aggregator”.

Although not all of Intellectual Ventures’ shell companies hold patents – some are management entities, others handle investment functions – the researchers write that “954 companies have patents recorded against their names”. A further 242 shells, they suggest, have been incorporated to receive patents covered by transactions that haven’t yet been completed.

Even a low-end estimate – the patents actually recorded in the USPTO as being assigned to one of those shells – identifies around 10,000 patents held by the firm.

At the upper end of the researchers’ estimates, Intellectual Ventures would rank as the fifth-largest patent holder in the United States and among the top fifteen patent holders worldwide.

Apart from companies that have tipped their patent portfolios into Intellectual Ventures’ kitty, its sources include more than 50 universities (detailed by the researchers in the paper, spanning at least eight countries; Australia is represented by Monash University and the University of Western Sydney).

The paper also sheds light on the troll’s strategy: if its target appears reluctant to play ball on a first approach, Intellectual Ventures then licenses its patents to a more aggressive third party, whose lawsuits demand a higher royalty than that originally demanded by Intellectual Ventures.

The paper, by Tom Ewing of Stanford and Robin Feldman of the University of California, is available here. ®